Too Busy to Mind the Business? Monitoring by Directors with Multiple Board Appointments

Abstract

We examine the number of external appointments held by corporate directors. Directors who serve larger firms and sit on larger
boards are more likely to attract directorships. Consistent with Fama and Jensen (1983), we find that firm performance has
a positive effect on the number of appointments held by a director. We find no evidence that multiple directors shirk their
responsibilities to serve on board committees. We do not find that multiple directors are associated with a greater likelihood
of securities fraud litigation. We conclude that the evidence does not support calls for limits on directorships held by an
individual.